Gerry Harvey shares the love online

Last week, high profile furniture and electronics retailer Gerry Harvey announced that Harvey Norman would reluctantly open an online store. He's been doing the numbers and decided he's damned if he does and damned if he doesn't. Customers are moving online, but online remains outside the comfort zone of most traditional retailers.

'My heart's beating very strongly on whether we make any money out of it,' he said, '[but] I haven't got any choice.'

The main stumbling block is the interpersonal relationship that lies behind every economic transaction, and how to replicate it online. It's the love that consummates every business deal, often written off by accountants as necessary 'good will'.

It's also something that businesses are usually confident about face to face, but not online, at least for the moment. They are waiting for retail's equivalent of Mark Zuckerberg to provide them with a blueprint for online shopping. As we know, Zuckerberg's Facebook definitively put paid to the idea that the internet is for nerds, and established it as a vibrant space for human interaction.

To speak of love in connection with economics is not being flippant. In fact Pope Benedict XVI argues in his encyclical Caritas in Veritate that love is the essence of economics. Business transactions are between human beings rather than market forces, and should therefore be motivated by love and other values that can be considered ethical.

That means 'do unto others as you would have them do unto you'. Make human beings feel that they are the focus of every business transaction and watch the profits flow.

This applies to both sides. For customers, it's worth considering gestures such as taking the time to affirm the person behind an online transaction that went well. There are many feedback mechanisms that allow buyers to declare their love for the vendor — 'great product delivered quickly, doing business with you is a pleasure'.

University of New South Wales Professor James Franklin has a commentary on Benedict XVI's 'economy of gratuitousness and fraternity' in new social ethics journal Solidarity.

Reflecting the Pope's view, he says all economic transactions are not purely monetary, but opportunities for each party 'to go beyond what is contractually required so as to create mutual assistance, human development and goodwill'.

In the short term, it's usually about the profits. But when love blossoms there are dividends that will have a wider benefit. Pope Benedict hopes we will become addicted to love and 'that love will not only manifest itself in individual transactions, but that there will arise a whole sector of the economy devoted in the first instance not to profit but to achieving positive social aims'.

Franklin comments on this Third Sector, or 'social business':

That concept can again look naïve at first glance, since one might expect hard-headed profit-focused companies to undercut enterprises saddled with a 'moral overhead' and drive them from the market. In some sectors of the economy, that may be so, but there is a long record of economically successful 'social' businesses in certain economic roles.

Perhaps Gerry Harvey's trepidatious heart beat will give way to a love that goes beyond profits.

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What a wonderful, inspiring post!Cassandra | 04 April 2011

I think your reflection, Michael, provides an important foil for Gerry Harvey and his besieged entrepreneurship. For a long time Harvey has been the darling of Sunday morning TV business programs demonstrating his oracular insights into the flawed strategies of various institutions. It seems to me that he has, for a very long time, been blinkered by his enduring trust in the 'good will' of his own customers so often, it seems, deprived of adequate personalised service. Perhaps he could have better 'built' his business by looking more creatively at the opportunities created by the online market.

Many of the goods available in his stores are made in Asia and sold retail at about one third of the floor price here. If Harvey was prepared to go for lower short term profits, cutting out a few more of the 'middle men,' he could have been quite competitive in the long term and still retain the 'good will' of the customer. Tough love, no doubt! David Timbs | 04 April 2011

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